Senior Policy Analyst Tom Opdyke briefs Metro 4/SESARM Air Directors on energy trends, incentives, and legislation shaping the South’s data center industry
For more information, contact Tyler Reinagel, Director of Policy and Research | treinagel@csg.org
CSG South Senior Policy Analyst Tom Opdyke delivered a virtual presentation titled “Data Centers: Energy Projections and Economic Drivers in the South” to the Metro 4/SESARM Air Directors’ Fall 2025 Meeting on October 30, 2025. His remarks covered the number of data centers across the region, their energy use, state tax incentives, and recent legislative actions shaping the industry.
Regional Overview
The South hosts 1,742 data centers, accounting for 42 percent of the 4,149 facilities nationwide. Virginia leads with 663 data centers, followed by Texas (405) and Georgia (162).
Other Southern states include:
- Florida (126)
- North Carolina (102)
- Tennessee (60)
- Missouri (48)
- Kentucky (37)
- Oklahoma (37)
- South Carolina (30)
- Alabama (26)
- Louisiana (23)
- Mississippi (10)
- West Virginia (7)
- Arkansas (6)
Power Usage and Generation
Data centers accounted for about 4 percent of total U.S. electricity demand in 2023. In the South, power usage by state included:
- Virginia: 25.6%
- Georgia: 4.3%
- Texas: 4.6%
- South Carolina: 2.5%
- North Carolina: 1.9%
- Oklahoma: 1.8%
- Alabama: 1.7%
- Tennessee: 1.3%
- Missouri: 1.2%
- Florida: 0.6%
- Kentucky: 2.2%
- Louisiana: 0.1%
- Arkansas, Mississippi, and West Virginia: not available
Opdyke noted that natural gas-fired units are expected to meet short-term increases in demand, while solar energy with battery storage is projected to play a growing role in long-term power generation.
State Tax Incentives
Southern states offer a range of incentives to attract and retain data center investments:
- Alabama: Sales, use, and non-education property tax abatements for up to 30 years.
- Georgia: Sales tax abatement for investments of $25 million or more.
- Mississippi: Sales and use tax exemptions for new or expanded facilities investing at least $20 million and creating 20 jobs paying 125 percent of the state’s average wage.
- Missouri: Sales and use tax exemptions for investments of $25 million or more and at least 10 jobs at 150 percent of the local wage.
- Texas: 100 percent sales tax abatement on property for 10–15 years for facilities investing $200 million over five years, with at least 20 new jobs and a minimum of 100,000 square feet.
- Virginia: Sales and use tax abatements for facilities investing at least $150 million and hiring more than 50 employees at 150 percent of the prevailing wage.
Legislative and Regulatory Updates
Recent state actions reflect growing attention to the industry’s impact on utilities and local communities:
- Georgia: Public Service Commission prohibited regulated utilities from passing power costs for data centers to other customers.
- North Carolina: Introduced similar legislation.
- Virginia: Vetoed legislation that would have allowed local governments to require water usage assessments before construction.
- West Virginia: Enacted legislation permitting data centers to operate microgrids if they consume more than 70 percent of generated power.
CSG South continues to monitor the growth of data centers across the region and their implications for energy infrastructure, economic development, and state policy.
Resources
- Presentation slides from the CSG South testimony
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